A report arguing that the River Thames should be returned into the major transport route it once was has been welcomed by Transport for London despite questions over funding.

A waterborne ‘tube’, running from Putney to Woolwich, could be set up for around £30 million - according to a study by the Policy Exchange think-tank.

In less than three years a fast and frequent boat service would provide a new transport route for millions of commuters, according to the report.

The study argues that new piers should be constructed all along the Thames with a stop earmarked for Chelsea Harbour and one for the south shore at Putney Bridge. Operators have also suggested that a stop close to Bishops Park may be viable. The Thames Highway would be fully integrated with the tube and it is estimated that 12 million river tube journeys would be made every year by 2026.

Hammersmith & Fulham (H&F) Council is backing the study as the borough officially has the most congested roads in London and one of the busiest tube lines. Transport for London (TfL) figures show that 7.6 million hours are lost in traffic in H&F every year and the Wimbledon branch of the District Line operates at 92 per cent of capacity at peak times.

Cllr Nicholas Botterill, Cabinet Member for Environment, says: “Through the heart of London, free of all the usual traffic jams or packed carriages, runs a major transport route that is used to a fraction of its potential.

“If TfL can upgrade the Thames river bus as a proper river tube - with more boats and more piers - commuters in the south of the borough are sure to benefit.”

The report makes it clear that river services, like the rest of the transport network, will need a public subsidy but at just 14 pence per passenger instead pf 56 pence per passenger on London Underground.

A TfL spokesperson said: “TfL welcomes the Policy Exchange’s report into river services along the River Thames. Their findings support much of the work the Mayor and TfL are already delivering through the River Concordat Group to promote the river as an alternative transport option.

“However, some of the recommendations in the Policy Exchange report would require substantial funding. Given the current constraints to the TfL budget it would be difficult to deliver all their recommendations in full.”

Between the 16th and 19th centuries the River Thames was the principal highway of the Thames Valley area as roads were much slower and less reliable.